Consider a hypothetical small island nation in which the only industry is weaving. The following table displays information about the economy over a two year period. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Year 2035 2036 Physical Capital Labor Force (Workers) 100 120 (Looms) 300 480 Based on your calculations, productivity from 2035 to 2036. Physical Capital per Worker (Looms) Labor Hours (Hours) 4,000 4,200 Output (Tapestries) 36,000 50,400 in physical capital per worker from 2035 to 2036 is associated with Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. Labor Productivity (Tapestries per hour of labor) Imposing a tax on looms O Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving Offering free public education to every worker in the country in labor
Consider a hypothetical small island nation in which the only industry is weaving. The following table displays information about the economy over a two year period. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Year 2035 2036 Physical Capital Labor Force (Workers) 100 120 (Looms) 300 480 Based on your calculations, productivity from 2035 to 2036. Physical Capital per Worker (Looms) Labor Hours (Hours) 4,000 4,200 Output (Tapestries) 36,000 50,400 in physical capital per worker from 2035 to 2036 is associated with Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. Labor Productivity (Tapestries per hour of labor) Imposing a tax on looms O Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving Offering free public education to every worker in the country in labor
Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions
Section: Chapter Questions
Problem 6WNG
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Transcribed Image Text:Consider a hypothetical small island nation in which the only industry is weaving. The following table displays information about the economy over a
two year period.
Complete the table by calculating physical capital per worker as well as labor productivity.
Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as
the quantity of goods per hour of labor.
Physical Capital Labor Force
(Looms)
(Workers)
300
100
480
120
Year
2035
2036
Based on your calculations,
productivity from 2035 to 2036.
Physical Capital per Worker
(Looms)
Labor Hours
Imposing a tax on looms
(Hours)
4,000
4,200
Suppose you're in charge of establishing economic policy for this small island country.
Output
(Tapestries)
36,000
50,400
in physical capital per worker from 2035 to 2036 is associated with
Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply.
Labor Productivity
(Tapestries per hour of labor)
Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts
Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
Offering free public education to every worker in the country
in labor
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